-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, BIbQdoVgFbm+4fp7+2VlS6b29Xa5IGbML7cIs3wxX0hv5E2NGw17l2vL/ERpIpBO zkJyli0TCmgslFn6iSEiOA== 0001157523-07-003928.txt : 20070424 0001157523-07-003928.hdr.sgml : 20070424 20070424073530 ACCESSION NUMBER: 0001157523-07-003928 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20070424 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20070424 DATE AS OF CHANGE: 20070424 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ADVANTA CORP CENTRAL INDEX KEY: 0000096638 STANDARD INDUSTRIAL CLASSIFICATION: PERSONAL CREDIT INSTITUTIONS [6141] IRS NUMBER: 231462070 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-14120 FILM NUMBER: 07783030 BUSINESS ADDRESS: STREET 1: P.O. BOX 844 STREET 2: WELSH & MCKEAN ROADS CITY: SPRING HOUSE STATE: PA ZIP: 19477 BUSINESS PHONE: 2154445341 MAIL ADDRESS: STREET 1: C/O WELSH & MCKEAN ROADS STREET 2: P.O. BOX 844 CITY: SPRING HOUSE STATE: PA ZIP: 19477-0844 FORMER COMPANY: FORMER CONFORMED NAME: TSO FINANCIAL CORP DATE OF NAME CHANGE: 19880306 FORMER COMPANY: FORMER CONFORMED NAME: TEACHERS SERVICE ORGANIZATION INC DATE OF NAME CHANGE: 19850812 8-K 1 a5383260.txt ADVANTA CORP. 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) April 24, 2007 -------------- Advanta Corp. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 0-14120 23-1462070 - -------------------------------------------------------------------------------- (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) Welsh & McKean Roads, P.O. Box 844, Spring House, Pennsylvania 19477 - -------------------------------------------------------------- ----- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (215) 657-4000 -------------- - -------------------------------------------------------------------------------- (Former name or former address, if changed since last report.) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Item 2.02 Results of Operation and Financial Condition. The information in this Current Report on Form 8-K is to be considered "filed" under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). On April 24, 2007, Advanta Corp. (the "Company") issued a press release describing its results for the quarter ended March 31, 2007. A copy of the press release is attached hereto as Exhibit 99.1 and incorporated herein by reference. On April 24, 2007 at 9:00 a.m. Eastern time, Company management also will hold a conference call, publicly announced in its press release dated April 10, 2007. The call will be broadcast for the public simultaneously over the Internet through www.advanta.com or www.investorcalendar.com. Replays of the call are available on the investorcalendar.com site for 90 days from the date of the call. In addition to historical information, this Current Report on Form 8-K contains forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ from those projected. Risks that may affect the Company's future performance are detailed in the Company's filings with the Securities and Exchange Commission, including its most recent Annual Report on Form 10-K and its Quarterly Reports on Form 10-Q. Item 9.01 Financial Statements, Pro Forma Financial Information and Exhibits. (c) Exhibits. The following exhibit relating to Item 2.02 shall be deemed "filed" under the Exchange Act: 99.1 Press Release issued April 24, 2007 regarding financial results for the quarter ended March31, 2007. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Advanta Corp. --------------------------------- (Registrant) Date: April 24, 2007 By: /s/ Elizabeth Mai --------------------------------- Elizabeth H. Mai, Chief Administrative Officer, Senior Vice President, Secretary and General Counsel EXHIBIT INDEX ------------- Exhibit Description Method of Filing - ------- ----------- ---------------- 99.1 Press release issued April 24, 2007 Filed herewith regarding financial results for the quarter ended March 31, 2007 EX-99.1 2 a5383260ex99_1.txt EXHIBIT 99.1 Exhibit 99.1 Advanta's Strong First Quarter Augurs Well for 2007 SPRING HOUSE, Pa.--(BUSINESS WIRE)--April 24, 2007--Advanta Corp. (NASDAQ: ADVNB; ADVNA) today reported first quarter 2007 net income of $21.4 million or $0.72 per diluted share for Class A and Class B shares combined. This includes a $0.01 per share asset valuation gain associated with the Company's venture capital portfolio. "We had a very good start to 2007," said Dennis Alter, Chairman and CEO. "Strong earnings, low credit losses and delinquencies, and the addition of new high credit quality customers continued to mark our performance." Ending managed receivables grew to $5.6 billion at March 31, 2007 with ending owned receivables totaling $1.1 billion. During the quarter, approximately 97,000 new customers were added and transaction volume of $3.4 billion reflected growth of 24% over the comparable quarter of 2006. The managed net credit loss rate decreased 32 basis points to 3.3% and the owned net credit loss rate decreased by 43 basis points to 3.1%. Conference Call Details Advanta management will hold a conference call with analysts and institutional investors today, April 24, at 9:00 a.m. Eastern Time to review the first quarter results for 2007. The call can be accessed by dialing 800-289-0468 and referring to pass code 1697462. The call will also be webcast simultaneously via a Vcall link on the Company's website, www.advanta.com, or at www.investorcalendar.com. Those interested in listening to the webcast should go to the website at least 15 minutes before the call to register and download any necessary software. Replays of the call will be available beginning at noon today on the Internet at www.advanta.com or www.investorcalendar.com or by dialing 888-203-1112 and referring to confirmation code 1697462. The conference call may include a discussion of non-GAAP financial measures, which are reconciled to the most directly comparable GAAP financial measures in the Company's press releases or the statistical supplements available at www.advanta.com in the "Corporate Info" section. About Advanta Advanta is the only credit card issuer (through Advanta Bank Corp.) exclusively focused on the small business credit card market. As one of the nation's largest issuers of business credit cards, Advanta is differentiated from other issuers by its size, experience in this market and commitment to developing meaningful product offerings and a high level of service tailored to the needs of small businesses. Founded in 1951, Advanta has long been an innovator in developing and introducing many of the marketing techniques that are common in the financial services industry today. Learn more about Advanta at www.advanta.com. This Press Release contains forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ from those projected. Risks that may affect the Company's future performance are detailed in the Company's filings with the Securities and Exchange Commission, including its most recent Annual Report on Form 10-K and its Quarterly Reports on Form 10-Q. In addition to the GAAP results provided throughout this document, the Company has provided managed receivable data and other non-GAAP financial measurements. Management believes that the non-GAAP financial measures used to manage the business may provide users additional useful information. The tables attached to this press release include a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures and a description of why the non-GAAP financial measures are useful to investors. ADVANTA SEGMENT INCOME STATEMENT (in thousands) Three Months Ended March 31, 2007 - ---------------------------------------------------------------------- Advanta Business Cards Other (A) Total ----------- --------- -------- Interest income $ 40,549 $ 7,806 $ 48,355 Interest expense 13,306 9,256 22,562 ----------- --------- -------- Net interest income 27,243 (1,450) 25,793 Provision for credit losses 10,083 0 10,083 ----------- --------- -------- Net interest income after provision for credit losses 17,160 (1,450) 15,710 Noninterest revenues: Interchange income 55,234 0 55,234 Securitization income 23,511 0 23,511 Servicing revenues 20,376 0 20,376 Business credit card rewards (19,332) 0 (19,332) Other revenues, net 4,537 2,042 6,579 ----------- --------- -------- Total noninterest revenues 84,326 2,042 86,368 Operating expenses 66,675 127 66,802 ----------- --------- -------- Income before income taxes 34,811 465 35,276 Income tax expense 13,646 182 13,828 ----------- --------- -------- Net income $ 21,165 $ 283 $ 21,448 =========== ========= ======== Three Months Ended March 31, 2006 - ---------------------------------------------------------------------- Advanta Business Cards Other (A) Total ----------- --------- -------- Interest income $ 32,810 $ 5,458 $ 38,268 Interest expense 10,024 5,931 15,955 ----------- --------- -------- Net interest income 22,786 (473) 22,313 Provision for credit losses 9,334 (50) 9,284 ----------- --------- -------- Net interest income after provision for credit losses 13,452 (423) 13,029 Noninterest revenues: Interchange income 44,393 0 44,393 Securitization income 33,578 0 33,578 Servicing revenues 13,682 0 13,682 Business credit card rewards (14,117) 0 (14,117) Other revenues, net 3,802 898 4,700 ----------- --------- -------- Total noninterest revenues 81,338 898 82,236 Operating expenses 59,497 142 59,639 ----------- --------- -------- Income before income taxes 35,293 333 35,626 Income tax expense 13,588 128 13,716 ----------- --------- -------- Net income $ 21,705 $ 205 $ 21,910 =========== ========= ======== (A) Other includes venture capital operations as well as investment and other activities not attributable to the Advanta Business Cards segment. ADVANTA HIGHLIGHTS (in thousands, except per share data) Percent Change Three Months Ended From ------------------------------ March 31, Dec. 31, March 31, Prior Prior EARNINGS 2007 2006 2006 Quarter Year - ---------------------------------------------------------------------- Basic net income per common share: Class A $ 0.74 $ 0.63 $ 0.79 17.5 % (6.3)% Class B 0.80 0.69 0.82 15.9 (2.4) Combined (A) 0.78 0.67 0.81 16.4 (3.7) Diluted net income per common share: Class A $ 0.70 $ 0.60 $ 0.73 16.7 (4.1) Class B 0.73 0.62 0.74 17.7 (1.4) Combined (A) 0.72 0.62 0.73 16.1 (1.4) Return on average common equity (annualized) 14.78 % 13.03 % 16.63 % 14.0 (10.6) COMMON STOCK DATA - ---------------------------------------------------------------------- Weighted average common shares used to compute: Basic earnings per common share Class A 8,879 8,870 8,846 0.1 % 0.4 % Class B 18,489 18,315 18,107 1.0 2.1 --------- -------- --------- Total 27,368 27,185 26,953 0.7 1.5 Diluted earnings per common share Class A 8,879 8,870 8,846 0.1 0.4 Class B 20,782 20,626 20,876 0.8 (0.5) --------- -------- --------- Total 29,661 29,496 29,722 0.6 (0.2) Ending shares outstanding: Class A 9,607 9,607 9,607 0.0 0.0 Class B 19,312 19,135 18,890 0.9 2.2 --------- -------- --------- Total 28,919 28,742 28,497 0.6 1.5 Stock price: Class A High $ 44.10 $ 42.63 $ 34.74 3.4 26.9 Low 35.94 33.52 28.82 7.2 24.7 Closing 40.08 39.81 34.09 0.7 17.6 Class B High 47.58 46.71 37.44 1.9 27.1 Low 39.47 36.51 30.84 8.1 28.0 Closing 43.84 43.63 36.87 0.5 18.9 Cash dividends declared: Class A 0.2125 0.2125 0.1134 0.0 87.4 Class B 0.2550 0.2550 0.1361 0.0 87.4 Book value per common share 21.17 20.65 19.44 2.5 8.9 (A) Combined represents income available to common stockholders divided by the combined total of Class A and Class B weighted average common shares outstanding. ADVANTA BUSINESS CREDIT CARD STATISTICS ($ in thousands) Percent Change Three Months Ended From ------------------------------------ March 31, Dec. 31, March 31, Prior Prior 2007 2006 2006 Quarter Year --------------------------------------------------- New account originations 96,781 116,157 82,617 (16.7)% 17.1 % Average number of active accounts (A) 848,375 786,224 649,384 7.9 30.6 Ending number of accounts 1,191,820 1,126,083 921,841 5.8 29.3 Customer transaction volume $3,389,065 $3,482,032 $2,733,922 (2.7) 24.0 Securitization volume increase excluding replenishment sales $ 368,453 $ 620,000 $ 165,000 (40.6) 123.3 Average receivables: Owned $1,284,900 $1,193,101 $ 929,795 7.7 38.2 Securitized 4,152,857 3,773,549 2,957,309 10.1 40.4 ---------- ---------- ---------- Managed (B) 5,437,757 4,966,650 3,887,104 9.5 39.9 Ending receivables: Owned $1,142,006 $1,133,132 $ 982,251 0.8 16.3 Securitized 4,444,055 4,073,128 3,045,600 9.1 45.9 ---------- ---------- ---------- Managed (B) 5,586,061 5,206,260 4,027,851 7.3 38.7 - ---------------------------------------------------------------------- CREDIT QUALITY - OWNED - ------------------ Receivables 30 days or more delinquent $ 28,544 $ 26,053 $ 26,335 Receivables 90 days or more delinquent 12,878 12,632 11,637 As a percentage of receivables: Receivables 30 days or more delinquent 2.50 % 2.30 % 2.68 % 8.7 % (6.7)% Receivables 90 days or more delinquent 1.13 1.11 1.18 1.8 (4.2) Net principal charge-offs: Amount $ 9,783 $ 9,169 $ 8,084 As a percentage of average receivables (annualized) 3.05 % 3.07 % 3.48 % (0.7) (12.4) CREDIT QUALITY - SECURITIZED - ------------------ Receivables 30 days or more delinquent $ 122,426 $ 108,159 $ 91,029 Receivables 90 days or more delinquent 54,633 52,279 40,131 As a percentage of receivables: Receivables 30 days or more delinquent 2.75 % 2.66 % 2.99 % 3.4 % (8.0)% Receivables 90 days or more delinquent 1.23 1.28 1.32 (3.9) (6.8) Net principal charge-offs: Amount $ 35,082 $ 33,100 $ 27,095 As a percentage of average receivables (annualized) 3.38 % 3.51 % 3.66 % (3.7) (7.7) CREDIT QUALITY - MANAGED (B) - ------------------ Receivables 30 days or more delinquent $ 150,970 $ 134,212 $ 117,364 Receivables 90 days or more delinquent 67,511 64,911 51,768 As a percentage of receivables: Receivables 30 days or more delinquent 2.70 % 2.58 % 2.91 % 4.7 % (7.2)% Receivables 90 days or more delinquent 1.21 1.25 1.29 (3.2) (6.2) Net principal charge-offs: Amount $ 44,865 $ 42,269 $ 35,179 As a percentage of average receivables (annualized) 3.30 % 3.40 % 3.62 % (2.9) (8.8) (A) Active accounts are defined as accounts with a balance at month- end. Active account statistics do not include charged-off accounts. The statistics reported above are the average number of active accounts for the periods presented. (B) Managed statistics are non-GAAP financial measures and represent the sum of owned (GAAP) business credit card statistics and securitized business credit card statistics. We believe that performance on a managed basis provides useful supplemental information to investors because we retain interests in the securitized receivables and, therefore, we have a financial interest in and exposure to the performance of the securitized receivables. CONTACT: Advanta Corp. Amy B. Holderer Vice President, Investor Relations (215) 444-5335 aholderer@advanta.com or David M. Goodman Director, Communications (215) 444-5073 dgoodman@advanta.com -----END PRIVACY-ENHANCED MESSAGE-----